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How To Choose The Right Franchise

Set out your attributes, priorities and budget to generate a shortlist of sectors or franchise systems – then you can start doing your due diligence on some suitable prospects.

There are simply too many franchise opportunities, in too many sectors, to research them all thoroughly.

Accelerate the process by first auditing yourself: what are your skills, priorities and financial resources?

Apply your criteria to the market to generate a shortlist of prospects. Then use our checklist of questions to put to the franchisor, and tips for quick and easy due diligence, before choosing your franchise.

With franchises available in such a wide range of sectors, choosing a franchise to invest your time and money into is no easy task. So how do you set your criteria to narrow down the choice?

Here are some questions you should ask yourself to whittle down the myriad franchise systems out there to a more manageable shortlist of prospects.

Questions to ask yourself

  • What are your goals and priorities – making money, having a passion for your field, improving your work-life balance?
  • Do you have a specific sector in mind already or are you flexible? Experience in a given field is rarely mandatory, so your resume won’t necessarily narrow down your options
  • What skills do you have and what do you enjoy doing? If you’re a people person who thrives on human interaction, for instance, then a retail franchise will likely suit you better than an internet franchise
  • Would you prefer a recession-proof business (such as fast food) or a franchise in a growth sector like care to reduce your risk?
  • Do you want to be a hands-on operator or a hands-off owner who hires staff to manage the business day-to-day? (The latter option tends to require a much bigger investment)
  • How much time are you willing to commit and does that include evenings and weekends? Retail franchises tend to involve weekends but not evenings, pizza delivery means both, while a website operates round the clock regardless of your working hours – so it’s a great option if, for example, you have young children
  • How much cash are you willing and able to invest yourself? And how much are you prepared to borrow? Van-based, home-based and internet-based businesses are generally much cheaper than, say, retail or food service franchises, which require more equipment and inventory and often premises and staff

Once you’ve asked yourself these questions you’ll be better equipped to decide which sectors or franchise systems on our franchise business directory best meet your criteria. You can also browse our franchise resales (franchises that are already trading and up for sale).

Once you’ve narrowed your choice to a few prospects, you can scrutinise their promotional adverts on our website and send online queries to franchisors – free of charge – to find out more.

Below are some questions you might pitch to the franchisor, via these online queries and later, during face-to-face meetings, if your interest becomes more serious.

Questions for the franchisor

  • How soon before you can expect to make a profit?
  • How much working capital will you need in the meantime?
  • How much income do existing franchisees typically earn?
  • Can you speak to several existing franchisees? Be suspicious if they insist on restricting you to a small number of handpicked franchisees
  • What training and support do they provide?
  • To what extent will they help with finding and fitting out premises (if needed)?
  • What fees will you have to pay and when?
  • What are their growth plans?
  • Are they compliant with the Franchise Code of Conduct? Regulated by the Australian Competition and Consumer Commissions (ACCC) the code sets out your rights and obligations as a franchisee

Due diligence

But don’t just take the franchisor’s word for it; do your own, independent research.

  • How do the initial investment, risk factors (operating in an ultra-competitive or declining market for instance) and expected returns stack up?
  • Research the company’s history and how its fortunes have ebbed and flowed over the years. Is the brand in good shape?
  • Google the brand name to find any media coverage of the company. Positive coverage might include a sustained growth in profits, positive community work or a well-received rebrand or new product line. Negative coverage might include a corporate scandal, poor trading figures or a botched revamp
  • Use customer review sites or social media sentiment analysis tools to gauge public opinion of the brand

Choosing a franchise that works for you means knowing exactly what you want out of your venture, your financial resources and the risks and rewards on offer.

There are plenty of questions to ask the franchisor – don’t proceed until you’re comfortable with the answers given. After all, it’s your time (usually at least three or five years) and money at stake.

Once you’re satisfied that you’ve made the right choice, you can move onto the next step: selling yourself to a franchisor.

Faye Ferris

About the author

APAC Sales & Marketing Director for, the world’s most popular website for buying and selling businesses globally and attracting over 1.5 Million visitors each month. To contact Faye please email [email protected]


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